"Destruction" of Home Quality - words mayoffend!

Friday, July 3, 2009 at 10:39AM

Preface to this Blog Contribution This edition of the blog was written by a new contributor, Mr.Grant Dorris.You can read his complete bio in the "Our bloggers" section -he is builder/contractor, LEED AP and Associate of IGP. BE PREPARED . . . . HIS WORDS MAY OFFEND A FEW READERS!

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STRAIGHT TALK FROM THE FRONT LINE This is myfirst contribution from the front line of homebuilding. I am one of the guys in the trenches who not only works on homes but also works with homeowners, builders and businesses to improve the quality of our built environment. I want everyone to think about a staggering statistic – 80% of all homes are built by only 20% of all builders. This ultimately means that a small percentage of homebuilders control the end products that are available to consumers. Most all of these homes would be classified as production built or tract built homes. This relatively small percentage of builders can take one of two paths: 1. Understand that it is their responsibility to build safe, comfortable living environments that balance with their surrounding natural environments - and accomplish this by integrating planning & design with climate & site analysis to maximize the energy efficiency, durability, indoor environmental quality and water conservation of the structures they build, while simultaneously minimizing waste and our impact on natural resources. 2. Choose the path that is fast, labor saving, cheap, and based on cleverness rather than quality – basically the exact opposite of Path . Unfortunately, most choose Path . This is the problem with the today’s homebuilding industry – it is not about building homes, it is about moving money and homes are just the vehicle by which their money is moved. The 20% doesn't really build anything, at least in a technical sense. All of the physical work is performed by subcontractors. From an article titled Chasing Ground by Jon Gertner, published October 16, 2005: “These subcontractors answer to a team of Tollexecutives at every site who are trained to see a community's physical manifestation as part of the larger process of packaging and selling the American dream. ''We're really a marketing company that happens to build houses,'' Doug Yearley told me.” Increasing shareholder value will never get anyone a quality home, and, up until recently, the home buyer has not cared. For the past 10 – 12 years, homeowners have enjoyed the most prolific real estate market that they will experience for many years to come. Many would live in a house for a couple of years, sell it, pocket a few thousand dollars and move to the next “it” subdivision. These were not lateral moves that reduced principal owed, they were “upgrades” that incurred more debt. Times were good, financing was easy and real estate appreciated at a rapid pace. Well, the music has now stopped and everyone has had to find a chair, so to speak. Most homeowners are now stuck in their current homes for a variety of reasons and will have to stay in their current home for longer than they probably anticipated. This brings me to the problem many of them will face: They have not lived in a house long enough to find out just how unsustainable and/or poorly built it is. To truly understand the flawed business model of today’s homebuilding industry, we need to look at the basic fundamentals of how20% of all homebuilders (production builders) operate. Plans, designs and specifications are often conceived in corporate offices far away from the actual building site and in a “perfect world” scenario. This perfect world scenario means that everything is flat, perfectly conditioned and within budget – just like the desk it was conceived upon. There is no thought paid to anything other than mesmerizing the consumer with fancy trim, granite countertops and aesthetic distractions. Quality, durability, efficiency, conservation, community and environmental stewardship are not thought to maximize profit like insignificant trinkets. Subcontractors hired to perform the various trades that render a house complete are paid less than market rates because of the quantity of work involved. As building has slowed, these same subs are forced to take pay cuts to make up for the decline in sales – take one for the team, if you will. Case in point, I recently received a letter from a large homebuilder I perform work for. I will paraphrase the gist of the letter demanding their second round of cuts: REDUCE THE COST OF YOUR LABOR AND/OR MATERIALS BY [AN ADDITIONAL] 10% OR WE WILL FIND ANOTHER QUALIFIED CONTRACTOR WHO IS WILLING TO PERFORM THE WORK FOR LESS MONEY. The letter states a couple of things of importance to note: “We can survive, provided we can drive costs out of our product” and “We know this will be a difficult time and one without [subcontractor] profitability.” Collectively, homebuilders are “driving the costs out of their products” by further cutting quality, durability, efficiency, indoor air quality, specifications and workmanship. Furthermore, they are fully aware that the price they are willing to pay for work will not result in any profitability for the contractors performing the work. Are these the conditions under which anyone would want to have a home constructed? For the past few years, it has been bad enough that consumers did not care about the lack of quality in the homebuilding industry because they were profiting from it. Imagine what we will get now that builders are intentionally and purposefully reducing the quality of an already questionable product. Throw in the fact that the subcontractors who were somewhat qualified to work on these homes are being driven out of the market and are being replaced by less qualified subcontractors who are guaranteed to not make a profit, and we have a real recipe for disaster. The uneducated public will think they are getting the deal of a lifetime. They will be wrong.